Currency in news: numbers, paper and counterfeits

On 17 February, the Union finance ministry said that over Rs 1 lakh crore worth of the new Rs 500 notes have already been printed with the presses churning out approximately 22 million pieces of it every day. “More than Rs 1 lakh crore worth new Rs 500 notes have been printed. Total 22 million pieces of Rs 500 are being printed per day," Security Printing Minting Corporation of India Limited (SPMCIL) CMD and joint secretary in the department of Economic Affairs, Praveen Garg, told reporters.

22 Feb 2017 | By Dibyajyoti Sarma

An RTI query revealed that the Reserve Bank of India had a stock of only around Rs 4.95 lakh crore in the new Rs 2,000 denomination notes when demonetisation was announced on November 8. The RBI did not have a single new note of the Rs 500 currency, which were introduced into the system only later.

Garg, however, refused to give the exact date when the printing of Rs 500 notes commenced.

SPMCIL has been running 24x7

There were 17,165 million pieces of Rs 500 notes and 6,858 million pieces of Rs 1,000 notes in circulation on November 8, 2016, the day prime minister Narendra Modi announced demonetising the two high denomination notes. The total amount of high denomination currency circulating in the system on that day was, thus, Rs 15.44 lakh crore (Rs 8.58 lakh crore in Rs 500 notes and Rs 6.86 lakh crore in Rs 1,000).

The Rs 500 notes are being printed by SPMCIL and the two presses of the RBI in the 40-60 ratio while the Rs 2,000 notes are being printed only by the RBI.

"We are printing Rs 500 and other notes, but not Rs 2,000 notes. What is remarkable is that where we used to take three days to print a certain amount of notes, now we are doing it in a few hours," Garg said.

SPMCIL is a government-owned company formed in 2006 that fulfills a sovereign function of printing notes, minting coins, printing non-judicial stamps, etc. Post- demonetisation, SPMCIL has been running 24x7, 3 shifts a day, to meet the currency requirements. As a process of remonetisation, to meet emergency requirements, the logistics department of the company also organised airlift of the notes to various cities, including, Kolkata, Chandigarh, Delhi, Guwahati, Lucknow, directly from the note presses at Nashik and Dewas.

Mysore, Hoshangabad presses using indigenous currency paper  

Reducing dependence on import and in line with the Make in India drive, currency printing presses at Mysore and Hoshangabad are using indigenous paper to the extent of 50% to print notes.

SPMCIL CMD Praveen Garg said both the plants have a capacity of 18,000 metric tonne. "With a view to encourage indigenisation in line with the Make in India campaign, we are now emphasising on R&D projects in the country. We have recently created a R&D unit at Nashik,” Garg added.

The company has entered into a MoU with Central Pulp and Paper Institute, Foundation for Innovation and Technology Transfer, CSIR, National Chemical Laboratories.

SPMCIL's sales turnover in 2015-16 fiscal was at Rs 4,647 crore and is expected to grow 18% to Rs 5,500 crore in current financial year. The paid up equity of the company stands at Rs 1,182 crore. The company has fully repaid the Rs 1,182 crore worth term loan granted to it by the government, making it debt-free.

"For capacity expansion, we plan to borrow money from the market. We are thinking of issuing bonds and debentures whenever we need funds that will be at a competitive rate of 8-8.5%, and we are engaging a credit rating agency for rating the company," Garg said.

RBI currency press refuses to disclose printing capacity

The currency note printing press of the Reserve Bank of India has refused to disclose its printing capacity, even as similar information is available on its website. Responding to an RTI application by Pune-based activist Vihar Dhurve, Bharatiya Reserve Bank Note Mudran Private Limited cited 8(1)(a) of the Right to Information Act to deny information.

The section allows a public authority to withhold the information disclosure of which would prejudicially affect the sovereignty and integrity of India, the security, strategic, scientific or economic interests of the State, relation with foreign State or lead to incitement of an offence.

The website of the press, however, mentions "the present capacity for both the presses is 16 billion note pieces per year on a 2-shift basis."

In his application, Dhurve had sought to know the printing capacity to print new currency notes of Rs 2000 and Rs 500.

Bharatiya Reserve Bank Note Mudran Private Limited operates two currency note press, one at Mysore in Karnataka and the other at Salboni in West Bengal.

In an earlier response to a separate RTI application, the press had refused to give details of preparedness to tackle crisis arising out of the sudden demonetisation of Rs 1000 and Rs 500 notes on November 8, 2016.

According to Finance Ministry, the value of demonetised currency was Rs 15.44 lakh crore.

Counterfeiters replicate 11 of the 17 security features

According to reports, barely two months after demonetisation, Pakistan-based counterfeiters have managed to introduced their versions of the new Rs 2,000 notes. The money is being pumped into the country via the permeable India-Bangladesh border. The details surfaced following recent arrests and seizures made by National Investigation Agency (NIA) and Border Security Force (BSF), a < i> The India Express < /1> report said.

Recently, a 26-year-old man from Malda in West Bengal was arrested in Murshidabad for carrying 40 fake notes of Rs 2,000 denomination. During the interrogation, he said the notes were printed in Pakistan, allegedly with the help of the Inter Services Intelligence (ISI). The smugglers were required to pay Rs 400-600 in genuine currency for each fake Rs 2,000 note, depending on the quality, the report said.

A study by investigators and experts of the seized notes revealed that at least 11 of the 17 security features in the new Rs 2,000 notes had been replicated. They included the transparent area, watermark, Ashoka Pillar emblem, the letters ‘Rs 2000’ on the left, the guarantee clause with the RBI governor’s signature and the denomination number in Devanagari on the front, said sources.

Although the print and paper quality of the seized counterfeits were poor, they resembled genuine notes. Besides, the seized notes had the watermark and a crackling sound, similar to genuine currency.

“The quality has improved from the last time and it is difficult to detect a fake note with naked eyes now. Last month, the FICN (Fake Indian Currency Note) smugglers pushed some sample notes of the new Rs 2,000 and Rs 500 denomination in small numbers to check their feasibility for circulation. We fear that they will be seen in the market very soon,” said a senior official linked to the probe.

Sources said the first known attempt to smuggle fake currency was made in the last week of December 2016, when samples from across the border were sent for approval to smugglers in Malda.

(Courtesy various news reports)

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